CryptoWorld News reports that following the U.S.-Iran peace agreement, crude oil futures prices plummeted, bringing back to investors' attention a batch of off-exchange options positions that had almost been forgotten, which bet on oil supply excess. Before the U.S. struck Iran, some traders had bet that crude oil oversupply would cause nearby contract prices to fall below forward contracts, entering what is called a "backwardation" structure. But after the U.S.-Iran conflict erupted, due to market concerns over supply shortages, near-month prices soared temporarily. In late April, WTI crude oil August contracts traded at more than $5 per barrel above September contracts, with September contracts also trading $4 higher than October contracts. That wave of price increases made over 20k cash-settled put options positions (equivalent to 20 million barrels of oil per month) nearly worthless. Now, as the spread between contracts narrows back to below $1 per barrel, these options have regained their reference value. As oil prices fall back to pre-war levels, not only are put spread positions re-entering investors' view, but the entire market's unidirectional holdings are also becoming more pessimistic. The latest weekly data from the U.S. Commodity Futures Trading Commission shows that hedge funds and other large speculators' net long positions in the international benchmark Brent crude have fallen to their lowest in six months, having decreased nearly three-quarters since the end of March.

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GateUser-3f3455c7

· 8h ago

A handshake between the US and Iran causes oil prices to collapse; geopolitical premiums come and go quickly. Trading energy derivatives really requires a tough stomach.

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LightsInTheMistyValley

· 9h ago

This plot twist is even faster than a DeFi protocol, the previously worthless options are now alive again, the market never lacks drama.

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0xCandleQuiet

· 9h ago

The forward premium structure has come back with zero warning—those veteran traders who kept their positions open without closing them are probably counting their money right now.

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Mint-FlavoredGasFee

· 9h ago

20 million-barrel put options turn from scrap paper back into chips—this volatility game is all about keeping your heart racing.

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As oil prices decline, positions betting on oil supply surplus are once again in focus

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